MoneyWise Live


Your Financial Lifeboat (Emergency Fund)

January 24, 2019

There are two kinds of people in this world - those whose finances stay safely afloat and those who sink slowly but surely into debt. You might be surprised to learn the difference has little to do with how much money they make.  What then separates the two?  It’s a financial lifeboat - otherwise known as an emergency fund. It keeps those who have it safe from life’s inevitable misfortunes while others drown in debt. Financial planner and teacher Rob West conducts our financial lifeboat drill on this MoneyWise Live.

Next, Rob and Steve answer these questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:

  • If you’re 68  and retiring in a couple of years, have a 401(k) that pays 7%, currently contribute $2000/month to the 401(k) and $600/month into  savings, should you adjust these contributions?
  • If you and your wife have $30,000 plus an emergency fund, no debt, are presently contributing 18% of your income to retirement,  and will be in need of a new home in the future, should you consider keeping your current home as a rental after buying a new one?
  • If you’re age 50 and thinking about purchasing your first home soon but are probably 2-3 years away from saving the 20% down payment, would it not be better to save the rental expense and go with 10% down?
  • If have $20,000 with which you’d like to earn good interest but keep it liquid, should you consider a high-yield savings account?
  • If your daughter’s baby  is experiencing such medicals issues that it’s drained her finances, should she consider cutting back on her tithing to make ends meet? 
  • If you’re going to be 63 this year,  plan to continuing work and are thinking about starting Social Security early which will bring in $700/month, is the benefit of  starting early and paying more on the home outweighed by the reduction from staring early?
  • If your husband is a part-time pastor, how do you go about setting up your home for housing allowances?
  • If your 18  year old son will graduate high school this year and you’d like to suggest his best options for short and long term saving while he goes to college, what should you tell?     

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